The Indian financial sector is undergoing significant evolution, driven by rapid digitalization, regulatory reforms, and a growing middle class. Mortgage lending, distressed credit, asset management, investment banking, and private equity fund management are key segments contributing to this transformation. As India’s economy expands, these sectors are poised for growth, especially with the increasing demand for housing, corporate restructuring, and wealth management.
Listed companies such as HDFC Ltd., ICICI Bank, and Bajaj Finance are actively shaping these industries, capitalizing on opportunities in mortgage lending and asset management. Investment banking firms like JM Financial and Kotak Mahindra Capital are driving capital markets activities, while companies like Edelweiss Financial Services are exploring distressed credit and private equity.
This sector’s growth reflects the evolving financial landscape and presents immense opportunities for both investors and companies.
Share Price
The shares of JM Financials are currently trading at Rs. 97.84 down by 8.64% from its previous close of Rs. 107.09 as of January 29, 2025. The stock also touched an intraday low of Rs. 95.28 which corresponds to a downtick of 11%.
Q3 Results
Financial Performance Overview
JM Financial Ltd reported a 21.5% year-on-year (YoY) decline in its net profit for Q3 FY25, amounting to ₹70.5 crore, compared to ₹89.8 crore in the same quarter of the previous fiscal. The company’s revenue from operations also saw a decrease of 3.8%, dropping to ₹209.2 crore from ₹217.5 crore a year earlier. Despite these declines, the firm has managed to maintain a stable position through strategic shifts and strong performance in select areas of its business.
Shift in Business Model
A notable development for JM Financial was its transition from an on-balance sheet model to syndicating transactions to investors. This change impacted the company’s loan book, which significantly reduced from ₹7,529 crore as of March 31, 2024, to ₹4,207 crore by December 31, 2024. The move aligns with the firm’s strategy to reduce its exposure to high-risk loans while focusing on fee-based income through syndication.
Loan Book and Provisions
The company’s provisions for non-performing assets (NPAs) saw a positive change, particularly in its wholesale real estate portfolio. The provision coverage ratio for this segment increased substantially from 54% to 93%. Despite the reduced loan book size, the gross NPA level remained stable at ₹685 crore, signaling that the company is managing credit risks effectively.
The reduction in group borrowings from ₹16,145 crore to ₹12,143 crore also suggests a focus on financial prudence.
Growth in Investment Banking and Private Wealth
JM Financial’s Integrated Investment Banking division performed strongly, closing 42 deals that collectively raised ₹88,996 crore in Calendar Year 2024. The company secured the top spot for the highest number of Qualified Institutional Placement (QIP) deals. Meanwhile, its Private Wealth business saw an 18% YoY growth in Assets Under Management (AUM), reaching ₹77,024 crore. These segments showcase the firm’s continued leadership in capital markets and wealth management.
Asset Management and Securities Growth
The company’s Platform AWS business, which encompasses asset management, wealth management, and securities, saw robust growth. The SEBI Margin Trade Financing book expanded by 38% YoY to ₹2,093 crore, while retail and elite wealth AUM increased by 12% and 42%, respectively. The mutual fund business grew exponentially, with AUM nearly tripling to ₹13,871 crore, including equity schemes that crossed ₹10,000 crore in AUM.
Mortgage Lending and Asset Reconstruction
In the mortgage lending segment, JM Financial experienced a reduction in its wholesale mortgage loan book, attributed to strong repayments. The provision coverage ratio for this segment improved to 94%. Retail mortgage lending, however, performed well, with AUM growing 33% YoY to ₹2,588 crore. Additionally, the company’s Asset Reconstruction Company (JMFARC) reported an AUM of ₹12,842 crore, with gross recoveries of ₹1,129 crore for the quarter, highlighting solid performance in the distressed asset management space.
Written By: Dipangshu Kundu
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